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Chapter 5 - Financial accounting in movies and television

from Part II - Media-dependent entertainment

Published online by Cambridge University Press:  22 August 2009

Harold L. Vogel
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Summary

Happy trails to you, until we meet again.

– Dale Evans.

This song is perhaps more appropriately sung by Hollywood accountants than by cowboys. But, as this chapter indicates, the problems that arise in accounting for motion-picture and ancillary-market income are more often due to differing viewpoints and interpretations than to intended deceits.

Dollars and sense

Contract clout

No major actor, director, writer, or other participant in an entertainment project makes a deal without beforehand receiving some kind of high-powered help, be it from an agent, personal manager, lawyer, accountant, or tax expert. In some cases, platoons of advisors are consulted; in others, only one person or a few individuals may perform all functions. Thus, an image of naive, impressionable artists negotiating out of their league with large, powerful, and knowledgeable producer or distributor organizations is most often not accurate.

As in all loosely structured private-market negotiations, bargaining power (in the industry's jargon, “clout”) is the only thing that matters. A new, unknown talent who happens on the scene will have little if any clout with anyone. Top stars, by definition, have enough clout to command the attention of just about everyone. In Hollywood as in other businesses, it has been observed, “you don't get what's fair; you get what you're able to negotiate.”

By hiring people whose ability to attract large audiences has already been proved, a producer can gain considerable financial leverage.

Type
Chapter
Information
Entertainment Industry Economics
A Guide for Financial Analysis
 , pp. 164 - 227
Publisher: Cambridge University Press
Print publication year: 2007

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